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Consent clause kills infringement claim

Argos Systems Inc, (‘‘Argos US’‘), specialising in the construction business in the US, owns a domain registration for argos.com dating back to the 1990s. The website displays its construction and design services with third party advertisements. Argos Limited (‘‘Argos UK’‘) own the chain of ARGOS stores selling consumer goods in the UK, along with a number of trade mark registrations in the UK and EU for ARGOS.

In 2012, Argos US’s website began to allow non-US visitors to see the ads displayed on its site, through Google’s AdSense. This greatly increased the traffic from UK visitors to the argos.com site. Third party ads displayed on the site included Argos UK’s own ads and the ads of its competitors, driving up advertising revenue for Argos US every time a visitor looking for Argos UK’s site inevitably clicked on an ad for Argos UK, in order to take them to their intended destination. This had the effect of increasing advertising expenditure for Argos UK and, even worse, alerting consumers to its competitors.

Argos UK brought an action in the UK High Court claiming trade mark infringement, including by way of free riding on the back of its reputation in the UK, and damage to the distinctive character (dilution) and reputation of its ARGOS trade marks (as well as passing off).

The claim failed in its entirety. Use of the domain name argos.com alone was not enough to establish infringement. Rather the combination of the domain name and the advertisements had to be considered together. Mr Justice Spearman agreed with the Defendant’s arguments that the contract in place between Argos UK and Google provided an express consent to the display of Argos UK’s ads on third party websites, effectively indemnifying Argos US. As for the competitor ads, which Argos UK did not consent to, the evidence could not establish that they were showing up when consumers searched for Argos. Rather, the evidence only showed that competitor ads would show up when consumers searched for those competitors.

Argos UK was also not able to not show that Argos US had actively targeted UK consumers. UK-centric advertisements were shown only as a result of cookie manipulation.

In any event, Argos US could rely on the own name defence. Its use had been with due cause, having traded from the argos.com site since 1992.